This Time is Different
By Guest Author - December 1st, 2009, 6:07AM
Today’s “Must Read” assignment:
A working paper by professors Carmen Reinhart (University of Maryland) and Ken Rogoff (Harvard) called “This Time is Different: A Panoramic View of Eight Centuries of Financial Crises,” (below) advises that major default episodes are typically spaced some years (or decades) apart, creating an illusion that ‘this time is different’ among policymakers and investors.
The authors also point out that there’s been far too little attention to how much domestic debt (as opposed to foreign debt that’s owned by offshore investors) influences the general trend in defaults and restructurings.
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December 1st, 2009 at 6:29 am
So glad to know that I actually found this, and posted it, before the Big Picture. That’s a first for me. But remain glad that the Big Picture continues to inform and help those awkward “fact based conversations” when you’re swimming uptream, especially in these increasingly uncertain times. I mean, no one really has any idea what happens next, right?
December 1st, 2009 at 8:27 am
Has anyone gotten to read the press release from Dubai? The financial shows keep talking about how the market is bouncing because the crisis had passed.
But, from what I could find, it was only about shuffling around corporate ownership and management and maybe some layoffs. Plus some unilateral statements that it would all get worked out.
Would this give you confidence if you were a creditor?
“Initial discussions have commenced with the banks of Dubai World and are proceeding on a constructive basis,” Dubai World said in the statement. “It is envisaged the restructuring process will be carried out in an equitable way for the overall benefit of all stakeholders.”
Just a fancy way of saying they ain’t paying right now. I wonder what the British citizenry think having to pick up the RBS tab for developing a foreign country?
December 1st, 2009 at 8:31 am
124 pages?! I wouldn’t read that much if it came straight from God Almighty.
December 1st, 2009 at 8:37 am
Today? More like this month’s must read.
My initial reaction – it sure makes it look like Roubini was right, again, when he said that Dubai (soon to be renamed Don’tbai) was the beginning of a wave of sovereign defaults.
December 1st, 2009 at 9:20 am
Is it still a must read if I’ve already got the book in my reading queue? I assume they put all the good parts of this into their book.
December 1st, 2009 at 9:52 am
You remember that surprise tsunami in the Pacific that did unimaginable damage and death? The new epicenter of the financial tsunami is in the Gulf States, better find some higher ground.
December 1st, 2009 at 10:50 am
Fascinating once in a lifetime historical view.
Someone always walks away enriched and lots get left behind holding the bag.
Ah, the garbage dump of the human age just got bigger.
How much longer can we loot, pillage, squander, destroy before ….
December 1st, 2009 at 10:09 pm
I have their (463 page) book on my nightstand waiting to be read. This looks like a little more accessable and succinct version. Haha
December 2nd, 2009 at 5:12 pm
This paper makes it clear why economics is called the dismal science.